Prenuptial Agreements are the same as Binding Financial Agreements. The only difference is that a prenup is the name given specifically to financial agreements that take place before two people are married or live together.
A prenuptial agreement, or a Binding Financial Agreement (BFA), is a legally binding agreement between two people who are planning to live together either as a de facto couple or in marriage. What many people do not know is that a Binding Financial Agreement can also be made if a couple is already living together or already married.
This agreement addresses what will happen in the event that the relationship dissolves via separation or divorce. It outlines the couple’s finances and property and explains how they will be divided between the two people.
A prenup or BFA takes into account all financial resources that the couple own independently and together such as cash, real estate, superannuation, businesses, investments, inheritances and can also include obligations to pay any debts or liabilities borne out of the relationship.
A Binding Financial Agreement can also be made after a couple have separated. Some people choose to make a Binding Financial Agreement instead of applying to the Court for Consent Orders to resolve their matter. To learn more about property settlement after separation, click here.
The Family Court can set aside a prenuptial agreement if it believes that:
If the Court questions the validity of the agreement, it has the power to make an order for interest to be paid under the agreement or to award damages. It may also order the termination of the agreement or enforce all or part of the agreement, as if it was an order of the Court. Depending on the circumstances, the Court may also override a prenuptial agreement if there are significant changes such as large contributions or if the couple has children that had not been considered in the document.
The key is to ensure that you engage a family lawyer that will take into account the many important factors that should be considered when drafting a Binding Financial Agreement.
While an engagement and impending marriage is one trigger for people to take steps to investigate BFA’s, it is also important for anyone else who is either in a relationship already or about to move in with their partner and:
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